this is simply to correct the formula for the bart payment increases from 12-13 through 19-20. we also recommend that you amend the proposed resolution required that the proposed feeder agreement be revised to include the floor, as i mentioned, but no more than 5% on decreases in payments. these would be annual payments from bart to sfmta and then we recommend that you approve that resolution as amended. regarding the fast pass agreement, 12 11 87, we recommend you amend the resolution to impose to reduce the cap from 14 million to 10.5 million for a reduction of 3.5 million. and then i would also point out that we did not recommend approval of that agreement. we say that approval is a policy matter as amended. >> thank you, mr. rose. and a few questions the clerk

and city attorney understand that the file has already reflected the revised formula for corrected payment so we do not need to make that amendment ; is that correct? >> that's correct. >> okay. and, mr. rose, just in thinking about this, putting a 5% floor since the contract is based upon a cpi, assuming a 5% deflationary annual number, is that correct? this would be protective of deflation of 5% or more every year? >> that is [speaker not understood] for changes in rider ship. formula includes rider ship. >> thanks, okay. >> colleagues, any questions of the budget legislative analyst? thank you very much. appreciate your report. and i know bart actually would like to come up and speak again. so, thank you again for being here. >> thank you. i just want to reiterate that we fully support the comments from mr. rifkin and mr. lee. and i appreciate mr. rose's summarization there. so, we do agree to the amendments that have been proposed. and thank you also for the

clarification. the feeder agreement, as it is set up, is not only tied to increases or decreases in inflation, but also rider ship. so, it's not just adjusting by inflation, but also by the number of riders connecting from muni to bart. and then going back to the fast pass agreement, before our time, the fast pass was initially accepted on bart in 1983 to help alleviate capacity problems that sfmta was incurring along the market and mission corridor. so, bart provides a valuable service to the riders of san francisco and to sfmta in providing a direct service along mission and along market bringing passengers from balboa park all the way up to as far as embarcadaro. this is the fast pass was not available to be used on bart. sfmta would no doubt incur additional expenses to carry those riders on their buses.

so, we are providing a service. sfmta does set the price of the fast pass. not only the original price, but also the differential pricing that was put in place a couple of years ago. they control the price of the fast pass and level of service that they offer connecting to bart stations. so, we provide supplemental capacity in those corridors and i believe it is a valuable service. so, and then lastly just to note, before the $10 price differential was put in place, muni still collected all the fast pass sales revenue and a abortion of that fast pass price supported the payments to bart for the service. so, that gets to the point from mr. rose's office that the subsidy from sfmta to bart is $5.6 million. so, there is a portion of the original fast pass price that also goes into the subsidy. and that $5.6 million is

approximately the level of revenue loss that bart incurs by offering the discounted reimbursement rate to sfmta. so, we agree it is a regional contribution that both agencies are making to this program, and we support moving forward. >> thank you, i appreciate that. >> thank you. >> just to be clear, you're saying that based upon the fast pass agreement, the kind of revenue loss and gain for you, you kind of wash out; is that correct? >> we -- by offering the discounted reimbursement rate at did $1.19compared to base rate of $1.75, the annual revenue loss is on the order of about $5 million for us. * >> okay. and -- >> and that is the deepest discount in the bart system. >> okay, okay. >> thank you. >> supervisor avalos? >> just a quick question. just a quick question. mr. rose touched upon it, that the feeder agreement, he described i think he said

voluntary. and historically how does that agreement come about? no one really describes anything where there is a payment made as voluntary. so, i'm a little bit surprised by that wording and how did this agreement first come about, what was the rationale behind it and policy objective? >> it predates me. back in 1987 there was a decision made regionally that bart should contribute to sfmta for the bringing the riders to the bart system. and, so, it has continued to that date. and as mr. lee said, it was to be raised on the number of connecting riders. but there was i guess the available -- the data was not able to be collected. so, the metropolitan transportation commission changed the formula to be linked to sales tax. which is somewhat reflective of the economy and the level of rider ship and the health of the bay area as the economy does better sales tax goes up,

ridership goes up. and as it goes down, so does ridership follows along accordingly. so sales tax was a proxy i would summarize from what mta changed, how they changed it back in the 1989. but going forward, bart has just -- we viewed this as a contribution that we're willing to make and we have done that. so, we're willing to continue to make the contribution. >> okay. seeing no other questions, thank you very much. like to open up to public comment if there are any members of the public that wish to comment on items 7 and 8, please step forward. mr. paulson. ♪ looks like a lovely feeder bart feeder money made. you're going to take my money away when you come and take the money away standing by a feeder meter and you're going to get a glimpse of a money reader and you take my money away

and how am i supposed to, if i don't have the money, give back give back give back to where my bart belongs get back, get back and they help bring the budget along budget left his home in [speaker not understood] zone and you have to have it back right knack get back, bart get back to the fast pass track get back get back you're gonna have a fast pass last ♪ i want to lastly say... ♪ you've got to have bart miles of bart and a fast pass on track and i hope your budget lasts the first [speaker not understood] bart ♪ thank you. >> thank you. any other speakers or singers? all right. seeing none, public comment is

closed. colleagues, items number -- items 8 and 9 are in front of us. i think based upon the bla's recommendation regardless, we're going to have to continue this item to make those amendments. so, i'd like to make a motion we'll continue to the call of the chair. i will also just comment, mr. rifkin, i don't feel comfortable right now moving this forward even with these recommendations. so, i'd like to speak with you or your staff about how you view these agreements and the parity. i appreciate that a lot of hard work has gone into it. seems like to me, though, we're getting the raw end of the stick and would like to understand that more. so, colleagues, do you have any other comments? okay. >> i'd like to think that even where the cap for the feeder agreement is at 5%, the cap for bart -- the fast pass agreement

is what looks like under the budget analyst recommendation, about 14%. that to me is still pretty high and i'd like to take that back to being rediscussed. >> thank you, colleagues. if we can do that, take that motion to the call of the chair without opposition. so moved. >> mr. chairman, if there are any actions on the proposed amendments by the budget analyst? >> we actually by the city attorney's comments we're actually not. >> deputy city attorney john givener again. you can adopt the amendment today and then continue so that the next time this item is agendized, the amendments will appear in the notice. you can adopt the amendments today and [speaker not understood]. >> okay. so, we can do that. we can adopt those amendments first. >> i'll move the amendments. >> okay. first of all, can we rescind the previous vote. colleagues, we can do that without opposition.

i'd like to make those amendments [speaker not understood] subject to the legislative analyst. we can do that without opposition. and from the underlying items number 8 and 9, we can continue them to the call of the chair. so moved. all right, thank you very much. mr. clerk, can you please call item number 10? >> item number 10, hearing on the annual review and adoption of the board of supervisors draft budget for fy's 2013-2014 and 2014-2015. >> thank you. and we have ms. cavilo from our board of supervisors office. give us one second. >> good afternoon, chair farrell, members of the budget and finance committee. angela [speaker not understood] clerk of the board. i'm here today with deborah [speaker not understood] to present the department's fiscal year 13-14 proposed budget based upon budget instructions

the committee provided at the december guideline hearing. as you know, we are on a rolling two-year budget cycle. the committee's general direction was to prepare a budget, a draft that was similar to the budget that was adopted last year with slight changes. today i'll take you through the current year's budget and the department's administrative and finance deputy deborah land iswill review 13-14 and 14-15. and finally since the goal today is to obtain your feedback * should you make significant changes or would like an additional presentation, we can return to the committee on february 13th if the committee desires. if the committee would indulge me just for a moment, specific to the new members on the board and interested members of the public, for background information we are a small department, but we have a full-time employee counted, has remained constant for many decades while delivering cost-effective services to the public. notably we do decrease the

department's advertising expenditures from 1 million down to 50,000. and the board has successfully convinced lafco and they have agreed to use general fund money and use existing surplus until it is spent down. we have reorganized and reclassified management and other positions to provide resources in needed areas. or create career ladder positions with existing positions. [speaker not understood] based wage increases still been able to find some savings. we have increased our revenue collection by implementing cost recovery from the enterprise department for city-wide membership and increased our assessment appeals fees. so, if we'll turn to the current year's budget. by division, it is approximately 12.4 million. and we typically look at the

budget from three points of view. from division, expenditure type and labor contracts. this slide shows expenditures by division where you see supervisors offices comprising 50% of the department's budget or 6.2 million. the office of the clerk of the board is the second-largest division comprising 24% or 3 million. the budget and legislative analyst comprises 16% or 2 million. the assessment appeals board is 7% or 9 20,000 which includes a one-time 350,000 for online software application very many and 1% for the youth commission and the sunshine ordinance task force. finally the gift that keeps giving is the lasco's willingness to spend down last year's funding and not appear on the budget. if things remain equal this may also be the case in fiscal years 13-14 and 14-15 budget.

alternatively, when looking at the budget by type of expense, the department's budget is 73% for salaries and fringe or 604 million. for salaries and 2.6 for fringe. 25% or 3.1 million for professional services, that includes yes, the budget analyst contract, but also the c-a-f-r, which is under 300,000, and the raab tracking system. the remaining 2% of expenses are materials and supplies. and work orders which are determined by the level of service required from the department of telecommunications, building maintenance and smaller amounts for risk management and youth work. if we look at the department's expenditure by costs, the budget overwhelmingly funds labor. budget and legislative analysis and our c-a-f-r. all other costs including materials and supplies, work orders, software licensing, legislative expense cost to each supervisor's offices

makeup only the% of the budget. ms. landis will now review the changes. we recommended for fiscal year 13-14 and 14-15 budgets. ms. landis? >> good afternoon, supervisors. deborah landis, deputy director at the board of supervisors. i have been asked to review the proposed budget changes that we have in our draft budget for fiscal year 13-14 and 14-15. as you can see, we have found some significant salary savings with the step adjustments from the third aid positions that were added in the current year -- excuse me, 12-13 budget. they're all added at top steps to the budget. and we are able to see some step savings there just under $2 80,000. so, that is definitely our largest change for the proposed budget for next year. to give a little bit of

background each year's budget begins from the biggest budget. so, that's the current year budget plus annualized changes. for example, new positions added part way through the year or -- and those positions would have an additional cost the next year when they're annualized. also from the base budget one-time expenses from the current year are removed such as equipment funding or project-specific funding. so, the largest changes year to year are all the salary and fringe benefit cost increases. the department's current year budget of 12.4 million grew to a base budget of 13 million which is the adopted budget from the prior year. there is a change about $45 from the adopted budget to the base budget. so, the 13 million is our starting point from where we make the cuts this year. and the changes that we're proposing result in

approximately $181,000 worth of savings resulting in a budget for 13-14 of about 12.9 million. i have already mentioned the step adjustments from the new hires and new fte this current year. and again, it's based on the local 21 m-o-u mandating that the legislative aides come into the city at step 1 unless there was loss of compensation, but they've been added to budget at top step. so, those are our step savings there. so, if we move on to the next item, we are still seeing some high assessment appeals board revenue and we are anticipating that will decrease. we think it will decrease at a slower rate than we had thought last year. so, we're able to add just almost $15,000 taking our revenue from 400,000 to 415,000 for projections for the next year. we're decreasing our

interpretation budget based on current and past year's expenditures with a little bit of buffer for anticipated additional need next year based on conversations with different members of the board about potential increased needs for interpretation. and we have included the funding for the third position for the youth commission in this draft budget. we know that this is a question that the board will consider and determine during the upcoming budget season. so, we have it in here while that conversation takes place and it can be kept in or removed at the board's -- based on your decision. the savings that we have for the draft budget are also offset by new maintenance costs for the [speaker not understood] insight system. the maintenance will have a cost of just under 28,000 for each year for at least the next

five fiscal years. so, those are the changes that we are proposing to make in the draft budget at this time. and the result of those changes as well as the salary and fringe changes that we're expecting to see city-wide can be seen in our chart here which is the same pie chart you saw a few minutes ago showing our operating budget by division. you can see that the proposed budget is currently at 12,87 2,580 dollars, or 12.9 million to use round numbers. so, it is essentially the same as this year's budget. the supervisors offices comprise 52% of the budget. the clerk of the board 25%, very similar to the 50 and 24% that we're seeing in the current year. and those costs will be 6.7 million and 3.2 million. the budget and legislative

analysis services we are budgeting at the same $2 million for the current year, 13-14 and 14-15 as well. one change that you may notice is the assessment appeals board has gone from just over 100,000 to approximately 600,000 and that is from removing the one-time project funding for our assessment appeals board tracking system. the youth commission and the sunshine ordinance task forces are, again, -- excuse me, 2% for the youth commission and 1% for the sunshine ordinance task force. once again, 13-14 as well as 14-15 we're budgeting zero dollars for lafco as that that worked on the surplus, they currently have half a million dollars. moving on -- excuse me, the budget by expenses, very similar to the current year budget. what you'll notice here is that the labor costs are growing. so, the labor costs go from 72%

in the current year budget to 76% in the proposed budget and it's 2.6 million to $3 million for that change there. again, those are the city-wide cost increases that all employees are costing more than we did this current year. so, 76% for salaries and fringe, you have the breakdown here 6.8 for salaries, 3 for fringe, 21% or 2.7 on professional services. again, budget and legislative analysis, c-a-f-r, those are the big ones in the professional services. and then 3% of expenses for materials and supplies, and work orders. and we have -- one of the changes this year as well that are the annualized costs of those aid. so, that has increased our labor cost.

moving on to 14-15, again, a very similar slide and the proposed budget for 14-15 is 13,246,906 dollars. so, again, we're breaking it down by division. and we have 52% from supervisors and 25% from the clerk's office, 6.9 million and 3.3 million there. so, again, we see the increased costs in the employees for the departments. each of these we're keeping $2 million for the assumption for the budget and legislative analysis agreement. and as you are aware, we are going out to bid with the rfp process for the contract because the current contract expires december 31st of this calendar year. and once again, lafco will be

funded from its existing surplus. looking at the 13.2 split out by expense type, we see an uptick from 76% for salaries and fringe to 77%. again, 21% or 2.7 million for professional services, and the remaining 3% for materials and supplies and work orders. so, the labor costs have increased from 3 million to 3.3 million between 13-14 and 14-15. unless you have any questions, i will turn it back to the clerk of the board. >> okay, thank you, ms. landis. >> thank you. >> thank you, ms. landis. that concludes our presentation, supervisors. and thank you for your instruction this past december. we are here to answer any questions or return in february for additional information if need be.

>> colleagues? supervisor avalos. >> thank you for your presentation. so, it is automatic there is a return in february based on our conversation today? or we can actually -- >> supervisor avalos -- >> approve your budget today and move forward. >> you could approve our budget today. however, if there were questions or deeper understanding of the budget or just a willingness to hold the budget until february, i'm happy to come back at that point. otherwise, we've provided you all of the information that you needed today to make that decision. >> thank you. well, i actually [speaker not understood] two go around, i would be okay your returning again if there are any changes. i would accept it as is. i actually am pleased to see also that we have continuation of the third staffer for the youth commission. and i've always worked with

youth commission probably since 1996 and see it as a vital part of the board of supervisors. but also actually served as mayor as well. so, we're providing that service for the mayor's office and youth commission has done a really good job of reaching out and getting input from youth around the city and a third aid position helps with the reach of the commission to reach young people across san francisco. so, i'm willing to support that. >> thank you, supervisor avalos. i know that mario is here today. he will be going around setting up appointments with all supervisors to talk about the actual plan for the next six months. >> great. supervisor mar? >> thanks, chair farrell. thank you, ms. cavillo and ms. landis. i just wanted to say i'm very impressed how lean the office is, but how much we do with so little funds. i appreciate the cost savings that were made with different salary steps and other efforts to reduce the cost. and i'm also supportive of

fully staffing the youth commission given their 17 members. the important increases to outreach to youth organizations, better development and capacity building for them. and also making sure that the commission lives up to its role advising the board. so, i'm really pleased for the changes and i'm supportive of the budget. >> thank you, supervisor mar. mr. chair, we're happy to return february 13th chance to talk to the other supervisors, not on the budget committee, about the budget so far? i want to make sure everyone has a chance to vet it before we send it forward. >> chair farrell, i have had an opportunity to speak with every supervisor on the department's budget. but again, more than happy to come back in february in the event there are new changes or new information comes to light. >> okay. colleagues, any preference here? i actually would be happy to approve it today and send it forward.

>> i would actually -- i actually would like to keep it in committee. there could be changes that might come forward based on, you know, six-month report is coming out soon. that could change things we would expect as a city. i'd like to have information before making a final decision. >> sounds great. so, we will intend to do that, then. >> i would motion just to continue to the call of the chair and we'll schedule a date before maybe february 20th for it to come back. >> sounds good. we'll do call of the chair, but we'll open it up to public comment first. thanks, ms. [speaker not understood]. at this time open it up to ifctiontion. any members of the public who wish to comment on item number 10? seeing none, public comment is closed. * i would concur with that. let's why don't we call it to the call of the chair. ms. [speaker not understood], we can work on a date to come forward in february. thanks very much. we continue to the call of the chair without opposition. mr. clerk, do we have any other items?

>> that completes the agenda for today. >> okay, meeting adjourned. [adjourned]

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